Retail Week Columns

HMRC’s Iceland probe shows warped priorities

Because life is short, and resources aren’t unlimited, we all have to decide on our priorities. I’ve always believed that my number one priority is keeping my colleagues happy – because that’s the best way to keep our customers happy, and so maximise the cash in our tills.

That’s why we’ve always paid our people as much as we can afford. For many years we were the second best payer of front line staff on the high street, ahead of the likes of M&S and John Lewis, and well above the minimum wage.

Twice in the last 10 years we have also been voted the Best Big Company To Work For in the UK – and were No 8 this year.

Although we have continued to raise pay each year, the introduction of the National Living Wage has brought our rates much closer to the legal minimum and this has recently has brought us under the baleful gaze of the HMRC Minimum Wage Task Force.

Our first offence, amazingly, is running a Christmas Club for employees that allows them to save money through the year. There is no obligation to join, or to spend the proceeds at Iceland, and they can get their money back at any time.

But because the money is kept in a ring-fenced Iceland bank account HMRC claim that it counts as a deduction for our benefit, and might just push some employees below the minimum wage threshold.

Given that we have well over £100m of cash in our other bank accounts, you might think the idea of us raiding this one seems a little fanciful. But the HMRC team has wasted many hours of our management time on this issue, and remains hopeful of bridging the Treasury’s funding gap with a fine running into tens of millions of pounds.

The same Task Force is also conducting a major investigation into whether employees who choose to buy their own work shoes (even though we provide free ones as part of their uniform) might have been paid less than the minimum wage in the week they made their purchase.

You’d think HMRC might put more effort into chasing the £1bn of corporation tax successfully avoided by the likes of Apple, Facebook and Google, or the VAT dodged on Amazon and eBay for which they castigated by the Commons Public Accounts Committee last year.

Iceland, in contrast, has paid nearly £1.3bn into the Exchequer in the last decade.

This has no doubt helped to fund two recent long investigations by the Information Commissioner’s Office, one into our sharing of information about known violent shoplifters through a closed WhatsApp group. Because safeguarding the privacy of the perpetrators’ personal data apparently trumps our ability to protect our colleagues.

The police are often too busy to attend when one of our shop assistants is terrorised by a thug with a hypodermic needle, or to examine CCTV footage, but apparently have ample resources to respond to complaints about offensive content on Twitter.

Council planning departments are supposedly too underfunded to deal with applications on time, yet can magically spot infringements and respond to them almost instantaneously.

I started my business to make money, but also to help others and put something back into society. Iceland has created well over 25,000 jobs directly, plus many more in its supply chain. We have never sought to avoid paying our fair share of tax, and we have given £23 million to charity in the last 10 years.

Particularly under a Conservative government, surely the public sector’s top priority should be to support and encourage responsible wealth creators, not to harass them?

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